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Three Issues to Consider Before Implementing a Weekly COVID-19 Test Policy

16 Dec

Three Issues to Consider Before Implementing a Weekly COVID-19 Test Policy

This article was written by Ronald W. Taylor, Venable LLP with special thanks to Cassandra Brumback, law clerk, for her assistance in its preparation.

The Occupational Safety and Health Administration’s (OSHA) vaccine-or-test standard has forced employers to make some tough choices. OSHA’s November 5, 2021 Emergency Temporary Standard (ETS) purports to require employers with 100 or more employees to implement either a mandatory vaccination policy or weekly testing for unvaccinated employees to protect unvaccinated workers from the coronavirus.

The ETS capped months of anticipation and angst among employers regarding testing and vaccination obligations following President Biden’s Path Out of the Pandemic remarks in September. Although many of the mandates described in the president’s remarks have been stayed amid litigation over their legality, many employers struggle with how to protect workers, customers, and clients against the spread of the mutating virus while at the same time both attracting and retaining workers.
One key question is whether to require employees to get vaccinated or to permit testing. While some employers prefer to simply mandate vaccination, for others this is not a viable option, and testing appears inevitable or desirable. Unfortunately, OSHA’s ETS creates several complex legal issues, and the testing option presents risks to employers electing that path forward. Here are three key issues employers need to consider before implementing a testing policy:

1. Who pays for the tests?

The ETS does not require employers to pay. Nevertheless, this is not a talisman for employers, and OSHA is clear that other laws and agreements, such as The Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act of 1964, state laws, or collective bargaining agreements may require the employer to cover testing costs, even though the ETS does not.

The ADA & Title VII

Some employees may be entitled to a reasonable accommodation because of their sincerely held religious beliefs or a medical condition that is incompatible with vaccination or testing.

The ADA and Title VII may require employers to pay for testing in these instances unless doing so would cause them an undue hardship. However, employers should note that an undue hardship must be more than a minimal burden or expense. There are several factors that can be considered to determine whether an undue hardship exists: whether the accommodation compromises workplace safety, decreases workplace efficiency, or creates a costly burden in the aggregate in combination with many accommodation requests. Such analysis is heavily fact-specific and not subject to a broad, easy rule.

State laws

Many state laws, most of which predate the pandemic, require employers to pay for employee business expenses, including medical testing. Examples include, but are not limited to, California, Illinois, Iowa, Kentucky, Montana, New Hampshire, New Jersey, North Dakota, and Pennsylvania. Employers in such states will likely be required to compensate employees for the costs of tests.

Collective bargaining agreements

Employers may be obligated to pay for medical testing or COVID-19 testing by the terms of a labor agreement with a union representing their employees. Even if payment is not expressly required, employers may be obligated to bargain with the union over the “effects” of the employer’s testing policy.

2. Must employers compensate employees for time spent testing?

This is tricky. Although the Department of Labor (DOL) has offered some guidance on the subject, it has not issued an update since OSHA released its ETS. While employers wait for further specifics, they should look to the federal Fair Labor Standards Act (FLSA) and relevant state law for guidance.

FLSA

The potential FLSA obligations to pay for testing apply to nonexempt employees as opposed to exempt employees. The FLSA is clear that employers are responsible for compensating nonexempt employees for their time spent testing and waiting for results during the regular workday.

But what about when employees get tested on their day off? There are two important considerations in answering that question:

a. Is the test for the employer’s benefit, and is it necessary for the employee to do their job safely and efficiently?

In general, if the employer requires a nonexempt employee to do something for the benefit of the employer, the time spent doing it is likely compensable. Testing is likely to be construed as being for the employer’s benefit, meaning that the time spent getting tested could be compensable, even on a worker’s day off.

Additionally, current DOL guidance suggests that when an employee has significant interaction with the public, like a grocery store clerk, the employer must compensate for tests taken during personal time because the test is necessary for the employee to do their job safely and efficiently during the pandemic.

b. Is the testing performed during work hours?

Another complication is an old FLSA rule that requires employers to pay when an employee does something for the employer’s benefit during typical work hours, even if those hours fall on a day off. For example, if an employee usually works 9 am to 5 pm, Monday-Friday, and gets tested as part of the employer’s COVID-19 program between 9 am and 5 pm on a Saturday, the employer will likely need to compensate them for that time.

Hopefully, new DOL guidance will shed light on this issue, but until then, employer should be aware of the potential requirement under the FLSA to compensate nonexempt employees for time spent getting tested.

State law

Some states, like California, have already issued guidance that COVID-19 testing time is work time and that employers must pay. The situation is less clear in other states; in Maryland, for example, employers must pay for any time employees are at work and on the clock. This means that employers need to compensate for tests administered on site, but arguably not if the employee gets tested elsewhere before work.

Ultimately, even if the time is compensable, employers can explore other options, such as paying a lower wage for testing hours or requiring the employee to take paid time off. These options vary greatly depending on state laws, and employers are advised to consult with counsel before implementing such a policy.

3. Is it worth it to give employees a testing option?

This last step is a cost-benefit analysis, and it will be different for each employer’s unique situation. How many employees will opt for testing over the vaccine? What will the costs be if the employer must pay for tests and/or testing time?

Alternatively, if an employer mandates the vaccine, how many employees would quit, or need to be fired for noncompliance? How difficult is it to hire more staff?

Conclusion

Employers with 100 or more employees should develop a plan for complying with OSHA’s ETS that considers the requirements of other laws, such as the FLSA and state laws. Although the ETS is currently on pause because of legal challenges, employers must be prepared, as a court ruling could restore the ETS to full force. Current OSHA penalties (they are slated to increase in January) can be up to $13,653 for each violation of the standard; for willful or repeated violations the penalties can be up to $136,532 per violation. These potential penalties, however, could pale in comparison to the costs of lawsuits asserting FLSA or other violations for failure to pay employees properly for testing costs and time.

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